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We’re one of 12 regional Federal Reserve Banks working together with the Board of Governors to support a healthy economy. Our job is to serve the American public — to serve you. And our mission is to foster economic stability and strength.

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Economic Research
We conduct research to support policymaking and thought leadership on issues important to the Federal Reserve and the Fifth District. We also inform the public through our data and economic analysis, publications, presentations and educational resources.

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We help ensure our financial system is operating safely and effectively, and we help support secure and efficient methods to transfer your funds through our financial system.
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We work with community partners to identify and address economic challenges and opportunities in low- and moderate-income communities in the Fifth District.

Economic Review

Nov/Dec, 1990

Ricardo Versus Thornton on the Appropriate Monetary Response to Supply Shocks

David Ricardo (1772-1823) recommended countering supply shocks with monetary contraction. Henry Thornton (1760-1815) advised a constant-money response. Their views hinged (1) on the neutrality or non-neutrality of money-stock changes on real output and employment and (2) on the costs of inflation. These same considerations influence Federal Reserve policy in response to oil shocks today.

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Lisa Kenney (804) 697-8179

Economic Review

Nov/Dec, 1990

Ricardo Versus Thornton on the Appropriate Monetary Response to Supply Shocks

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